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How Internal Audit Can Streamline Processes Through RACI Charts

By Hernan Murdock

| April 10, 2018

Effective communications, teamwork, accountability, follow-through, and supervision are key ingredients in the effective work of programs, processes and projects. Unfortunately, many organizations suffer due to confusion, finger-pointing, and a misunderstanding of who’s responsible for what. These issues can be resolved by using a tool that clarifies ownership, encourages collaboration and formalizes delegation, so everyone involved knows what is expected of them.

An effective operational process is characterized by clarity related to what tasks will be performed, who will do them, who will provide assistance, who will be informed about what is being done, and who accepts the results and determines they are acceptable. This facilitates coordination, delegation, accountability, communication, supervision and also improves the quality of internal controls like segregation of duties, reviews, and approvals.

The RACI Chart is a very useful tool to help processes operate effectively. RACI is an acronym derived from the four roles and responsibilities that various parties play in a program or process. It describes the participants’ roles: Responsible, Accountable (or Approver), Consulted and Informed. In addition to individuals, it can also apply to departments, but the more specific the parties mentioned are, the less likely it is that there will be confusion.

Responsible

This refers to those individuals responsible for performing the task and making sure the work is done. Naturally, for every task identified there needs to be at least one individual assigned as Responsible, who makes sure that the task is performed according to specifications and as required by the approver. Others may assist or lend support, but they work as resources allocated to those responsible and this arrangement keeps accountabilities in place.

Accountable (or Approver)

This identifies the individual that approves the completed activity. Since a review is required before an approval, this individual is accountable for making sure the activity is satisfactory and meets performance standards. This person could also be the one who delegates the work. There must be only one accountable person specified for each task.

Consulted

This role describes those whose knowledge and expertise is important for the task to be completed effectively. Those consulted could be subject matter experts (SMEs) and there is a two-way communication between those responsible and those consulted. This role is a support role, helping through their expertise to enable the completion of tasks or deliverables.

Informed

This role refers to those who should be kept up to date about the activities being performed, the progress made on them, or their completion. Sometimes the communication occurs only when the task is completed, but that should be agreed upon. It consists of one-way communications.

Sometimes the person that is Accountable for a task is also the person Responsible for completing it. When this happens, it is indicated in the matrix with an R/A: Responsible/Approver.

Every task should have at least one R, one A or R/A – someone has to do it, and someone has to be accountable for it being done correctly. Additionally, everyone listed in the RACI Chart should agree with the roles being assigned to them and have the necessary skills and resources to get the work done.

Since the list of participants on the top row of the RACI Chart is often taken from the organization’s chart, it may be useful to also indicate who is not involved in the activities. By specifying who does not participate, it makes it clear that those resources are relieved from any involvement in the project or process and are therefore free to engage in other activities. If this dimension is added to the RACI Chart, it can be indicated using the letter O (for Omitted), thus resulting in a RACIO Chart.

How to Construct a RACI Chart

The chart (like a matrix) is typically created with a vertical axis (left-hand column) listing of tasks or activities. The items on the list can consist of the key activities from a Gantt Chart, Work Breakdown Structure (WBS), procedures document, or other lists of activities or deliverables for a process or project. The horizontal axis on the top row shows the parties involved; it can be individuals, teams or relevant units from an organizational chart, but I prefer individual’s names whenever possible to be specific and ensure clarity.

At the intersecting point, the corresponding letter is entered based on the role each person plays in the accomplishment of the activities noted.

In addition to the benefits it provides during planning for the effective execution of project and process activities, a RACI Chart can also be a very helpful tool as an add-on to procedures documents. Since in many organizations the procedures documents show what needs to be done, but don’t always show who is expected to perform those activities, finger-pointing and missed steps become a problem. In those cases, a RACI Chart added to the procedures documents will often solve the problem.

Since the chart does not include due dates or details about how to communicate with those labeled “I”, other tools may serve as companions. Gantt Charts can be useful when it's necessary to show task start, end, and duration. A Communications Matrix may be useful as well to indicate how communication should be provided to those that should be informed and consulted, how often, using what media (e.g. meeting, phone, video conference, report), who should be copied, and where the corresponding document or notes should be stored.

RACI Charts are effective to improve transparency and accountability. Internal auditors can use them within their departments or as a recommended tool when client programs, processes and departments show a lack of accountability, communication and collaboration.

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